Reimburse an employee in QuickBooks Online Payroll

If your employees used their personal funds to pay a business expense, you can record the expense when it is accrued and pay them later. We'll show you how.

Record the expense

Before paying your employees you must first record the expense.

Set up a liability account to record expenses when employees report them

1. Follow these instructions to set up a new account.
2. Set the account type as Liabilities.
3. Save account under Other Current Liabilities.
4. Set your tax form section as Other Current Liabilities.
5. Give the account a name that makes sense to you, such as Employee Expense Reimbursements Payable.
6. Select Save.

Add the expense as a journal entry

1. Select + New, then select Journal Entry.
2. On the first line:
   • Under Account, select your liability account.
   • Under Credits, enter the amount you owe your employee.
   • Select the Name ▼ dropdown and find the name of your employee.
3. On the second line:
   • Under Account, select the expense account that fits the purchase your employee made.
   • Under Debits, enter the amount of purchase.
4. Select Save and close.

After recording the expense, you can now pay your employee through payroll.

Pay your employee

First you must set up employee reimbursements in your Payroll.

Add or edit pay types in QuickBooks

1. Go to Payroll, then Employees.
2. Select your employee.
3. From Pay types, select Start or Edit.
4. Select Common pay types ▼ select Reimbursement. 
5. Leave Recurring Amount blank.
6. Select Save.

Check the mapping for your reimbursements

1. Go to the Gear icon on the top right and select Payroll Settings.
2. Under Accounting, select the Pencil icon.
3. Scroll down to Wage Expenses and select the Pencil icon.
4. Scroll down to Reimbursements and choose the liability account you made earlier.
5. Select Save, then Done.

When you next run payroll, put the amount to be reimbursed under the Reimbursements box. Your employees will then be paid.